The age limit to receive a RDSP grant and/or bond was indentified by families as the second most challenging barrier to the RDSP. Individuals with an RDSP don’t qualify for the government grants or bonds if they are over 49 years of age.  The cut off year for making RDSP contributions is 59, so those who don’t qualify to receive the grants/bonds have 10 years or less to build their RDSP.

Policy in a box:

  • Government Grants can contribute up to $3,500 in matching grants in one year, and up to $70,000 over the beneficiary’s lifetime
    • A grant can be paid into an RDSP on contributions made to the beneficiary’s RDSP until the beneficiary turns 49 years old
  • Government Bonds are a little less, as the government will pay bonds of up to $1,000 a year to low-income Canadians with disabilities
    • No contributions are required to receive the bond and the lifetime bond limit is $20,000. A bond can be paid into an RDSP until the year in which the beneficiary turns 49 years old
  • If someone is eligible for both bond and grant, their maximum combined total of grant and bond is $90,000

In the survey responses, people have expressed frustration that the grants/bonds amount hasn’t been indexed to reflect the increased cost of living (COLA) and that the contributions should be made available for all RDSP holders until end of life.

“The government doesn’t contribute with grants and bonds to people’s RRSP’s or RESP’s, so why should they contribute to RDSP’s?”

The RDSP grants and bonds are annual financial gifts, which acknowledge the extraordinary expenses that are associated with living with a disability and acknowledge that people with disabilities do not have to live in poverty. If people with disabilities are apparently living on average until 83 years (see RDSP Barrier #4 Blog: LDAP), it’s puzzling that the grants/bonds end at age 49.

Age Matters:

  • 49 years: the last year that RDSP Grants/Bonds can be contributed
  • 59 years: is the last year that a person can contribute to their RDSP- compared to an RRSP a person can contribute up to the age of 71
  • 83 years: the age used in the LDAP formula to calculate RDSP payments as the average life span of the persons with disabilities

Would 65, the senior citizen age, make more sense as the grant/bond cut off age? If so, the 10-year rule could be extended to age 75.  For RRSP’s, people can contribute up until they’re 71, yet for the RDSP it’s only 59.

It’s difficult to create rules that work everyone, but there should be some symmetry or compatibility between the RDSP and other similar programs – like the RRSP. People with disabilities have different reasons to open an RDSP – some would like to take money out earlier because of health concerns, while others expect to live a long life and would like to be able to use it (and continue to contribute) much longer.

For individuals starting their RDSP in later years, the current cut-off age limit means that there’s not much time to accumulate financial security for their future.  Yet, the grants and bonds symbolize Government’s awareness that the cost of living is often so much higher than someone who doesn’t have a disability.

What changes could be made?  Could the RDSP grants and bonds age limit be more flexible?  Could there be a way in which older RDSP beneficiaries could still be able to create a financial security? We think so, but would like to hear what you have to say about RDSP grants and bonds in the comment box below and you have only a few more weeks to take the survey!!!

If you haven’t already, let us know what you think by taking a few minutes to fill out our RDSP 3 Year Review Survey here!